Sandwell Council will foot the initial bill to transform The Public into a sixth form college, and also underwrite the costs of redundancies for the gallery’s workers.
The authority has said a proposed deal with Sandwell College to use the venue for 500 A-level students would save the annual subsidy of £1.5 million which chiefs currently provide for the New Street gallery.
However, the short-term costs of the proposal, which will be decided upon next Wednesday by the council’s cabinet, are expected to be larger than that sum. The council will pay for the work, and then be paid back in the form of the college’s rent on the building over 25 years, according to documents prepared for the meeting.
Council leader Councillor Darren Cooper has said that over the life of the contract, the move will still save £37.5m.
A report which will go before the cabinet has been redacted so that commercially sensitive finances of the 25-year partnership – called a concordat – have been removed, although it said: “Under the existing management and services agreement with the Sandwell Arts Trust which was entered into 2009, the council has certain contractual and financial responsibilities with regards to the ‘wind-up’ costs of the Sandwell Arts Trust.
“These include redundancy and pension liabilities for Sandwell Arts Trust employees.” Around 60 workers will lose their jobs when the gallery closes. The council has to cover their redundancies and pensions as Sandwell Arts Trust does not have significant reserves and it was subsidised.
Councillor Cooper said: “The council’s link-up with Sandwell College will provide a viable, long-term future for The Public building which saves council taxpayers an estimated £37.5 million over the next 25 years. We are still finalising precise details with the college of our prospective agreement with them.”